According to a report in the Financial Times, the European Court of Justice (ECJ) will announce its ruling on Europe’s financial transactions tax (FTT) next week, well before 2015, which was when it was expected.
News of this has led a European think tank to predict that there is now a more than 80 per cent chance that the UK’s legal challenge to the FTT will be thrown out, either because it is judged to be premature or because of an outright ruling against the Government.
The Treasury launched legal proceedings against the FTT, also referred to as a “Tobin” or “Robin Hood” tax, around a year ago amid concerns that it would damage the City, with a potential fall in the value of equity and debt holdings in the UK of £3.6bn.
The Government also objected on the grounds that the levy would interfere with the national right to decide taxation and that it could capture many transactions performed outside the FTT territory.
However, under pressure from France and Germany, two of the 11 member states signed up to the tax, the ECJ has accelerated proceedings in the case by deciding not to commission advice from the Advocate-General or to hold a public hearing.
This has led the think tank Open Europe to conclude that the UK is heading for a defeat, although a spokesperson for the ECJ said that the rapid progress of the case – 11 months against an average of 16 – should not be taken as an indication of the likely verdict.
Meanwhile, others say they would not regard any dismissal of the UK’s case as a huge setback, as the Treasury could launch further legal action and a spokesman for Chancellor George Osborne said: “we are confident we will be able to get an outcome which would protect the single market and non-participating member states.”
Mackrell Turner Garrett Solicitors in London
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